The Myth of ‘Simple Commodity Production’ (2005)

The New Palgrave: A Dictionary of Economics of 1987 represented the distilled wisdom of the economics profession. The article on ‘Karl Marx’ was written by the leading Marxist theorist of the day, Ernest Mandel. This multi-volume work included enough articles on Marxism to enable a separate volume on it to be extracted and published, The New Palgrave: Marxian Economics, 1990, in which Mandel’s overview had pride of place. He referred to ‘what Marx calls “simple commodity production” – “einfache Waren-produktion”.’[note]Mandel “Karl Marx”, p.4.[/note] In this, quasi-official expression was given to the most enduring myth of Marxology.

For Mandel was following a very long tradition. Paul Sweezy in his much-used classic textbook The Theory of Capitalist Development stated ‘Marx begins by analysing “simple commodity production”…’[note]Sweezy Theory of Capitalist Development p. 23.[/note] (Notice the quotation marks, but, as with Mandel, unsupported by any actual reference.) Earlier, in the thirties, Oskar Lange, in explaining Marx’s theory of value, said Marx starts with such a notion: ‘Marx calls it “einfache Warenproduktion”.’[note]Lange “Marxian Economics and Modern Economic Theory” in Review of Economic Studies Vol. II 1934-35, p. 195, p. 198. He continually uses the same expression in the rest of the article. But there is something strange about it: a) he never translates the phrase; so the words “simple commodity production” do not appear; b) this is the only German expression in the article; as if it were a peculiarly untranslatable technical term of Marx’s; but it isn’t untranslatable, and it isn’t Marx’s.[/note] A later authority, R. L. Meek, in his 1967 essay on ‘Karl Marx’s Economic Method’ alleged Marx had a model ‘he called “simple” commodity production’[note]Meek, Studies in the Labour Theory of Value, (2nd ed. 1973) Appendix p. 303.[/note].

But the simple truth is that Marx never called anything ‘einfache Warenproduktion’; the term cannot be found in his writings.[note]In English we find one reference to it in Theories of Surplus Value, Part II, p.501, Marx-Engels Collected Works (MECW) Vol. 32 p.132. But in the German original it is “blose Waarenproduction”, ie. pure commodity production: Marx “Zur Kritik…” Marx-Engels Gesamtausgabe (MEGA) Abt. II Band. 3.3 p 1123.[/note]

Who, then, introduced it? The term occurs in Engels’s Preface and Supplement to his edition of Capital Volume III, and it was interpolated by him into the text itself (as keen-eyed readers can deduce from the editorial brackets surrounding the passage containing it).

In his Preface Engels claimed that at the beginning of Volume I of Capital ‘Marx takes simple commodity production as his historical presupposition, only later, proceeding on this basis, to come on to capital’: the advantage of this was that he could proceed ‘from the simple commodity and not from a conceptually and historically secondary form, the commodity as already modified by capitalism’.[note]Marx Capital Volume III, Preface by Engels p. 103.[/note] This is in fact a misreading: Marx never used the expression ‘simple commodity production’ in Capital. Likewise, it is certain he never referred to the capitalistically produced commodity as a secondary derivative form.[note]There is a passage in which Marx presupposes the worker owned his own product (Marx Capital Volume I, pp. 729-30). But that passage is written in hypothetical mode. I argue it is counter-factual in character in Arthur The New Dialectic and Marx’s “Capital” Chapter 6.[/note] Marx certainly does not develop the idea of ‘simple commodity production’ at the point where it was supposed to be under discussion, namely the first few chapters. Rather, as the first sentence of Volume I makes clear, the simple circulation discussed in the first few chapters is that of the capitalist economy.

The only occurrence of the term ‘simple commodity production’ in the whole three volumes of Capital occurs in Volume III, but this is in a passage given to us subsequent to Engels’s editorial work, as he himself warns us in a note.[note]Marx Capital Volume III, p. 370 and p. 371n.[/note] It is now possible to check this against the manuscript itself, which has been published in the new Marx-Engels Gesamtausgabe (MEGA). It is clear that the entire paragraph was inserted by Engels (as, indeed, was the one on the next page about capital’s ‘historical mission’).[note]Compare the version of Volume III in Marx-Engels Werke, Band 25, pp. 271-73, with the 1863-65 manuscript of it in MEGA Abt.II Band 4.2 pp. 334-36.[/note]

Later in the text Engels also inserted the phrase ‘and commodity production in general’.[note]Marx Capital Volume III, p. 965.[/note]

It is not very usual for an editor to impose his own reading on the text. Why, then, did Engels do it? The reason can be established with some precision. However, first let us note that Engels’s cast of mind was primarily historical. In his review of Marx’s 1859 Contribution to the Critique of Political Economy he put forward what came to be known as the ‘logical-historical’ method (another term Marx never used, by the way). When he responded to the first proofs of Capital, he reacted to the proposal to add a special appendix on the value-form by urging that this take the shape of a proof from history.[note]Engels letter to Marx of June 16th 1867 in Marx and Engels Selected Correspondence, p.186.[/note] (Marx ignored this advice.) However, when Engels came to write Prefaces to Capital I in 1883, 1886, and 1890 he did not suggest that the first part was historical. Nor did he refer to ‘simple commodity production’ in his Preface to Volume II. It was only in 1894 in the Preface to Volume III that he came up with the idea in the context of judging what has been called ‘the prize-essay competition’ (in which people had been challenged by Engels, in his Preface to Volume II, to solve the problem of generating a uniform rate of profit on the basis of the law of value). This gives us the requisite context for understanding Engels’s intervention.

Engels became involved in the discussion of ‘simple commodity production’ because it seemed that in the third volume of Capital Marx abandoned the law of value in favour of another principle of price determination. Of course, in Marx’s procedure values are a stage in the process of generating the Volume III ‘prices of production’. But, if such values are not empirically present because they are superseded by these prices of production, are they not merely fictitious? Engels reacted to this possibility by interpreting the stages of Marx’s presentation historically in order to ensure that the values were indeed empirically visible, but, of course, in the past, before capitalism ‘modified’ the relationships involved.

Thus, when in response to Capital Volume III Conrad Schmidt put forward the thesis that the ‘value’ discussed in Volume I is a ‘necessary fiction’, Engels wrote to him arguing that value is real enough for practical purposes at the stage of ‘simple commodity production’.[note]Letter to Schmidt of March 12th 1895; in Marx and Engels Selected Correspondence, p.481-85.[/note] The day before writing to Schmidt, Engels had written to Werner Sombart in much the same vein, arguing that ‘value had a direct and real existence’ at the time ‘when commodity exchange began’, but ‘this direct realisation of value … no longer happens’, for ‘the value of the capitalist mode of production … is so thoroughly hidden’.[note]Letter of March 11th 1895; in Marx and Engels Selected Correspondence, p.481.[/note] So strongly did Engels feel about this that he wrote a special paper on the subject, which was placed as a Supplement to the second edition of Capital Volume III. He was there concerned to dispel any doubt that ‘what is involved is not just a logical process but a historical one’. After developing the point at length, he concluded that ‘Marx’s law of value applies universally, as much as any economic laws do apply, for the entire period of simple commodity production, i.e. up to the time at which this undergoes a modification by the onset of the capitalist form of production.’[note]Marx Capital III, Supplement by Engels pp.1033 & 1037.[/note]

It is true that Engels was able to cite a passage from the manuscript of the third volume in which something like the content of the idea of a stage of simple commodity production was mentioned by Marx. Seizing enthusiastically on this, Engels claimed that ‘if Marx had been able to go through the third volume again, he would undoubtedly have elaborated this passage significantly’[note]Marx Capital III, Supplement by Engels p. 1034; the full passage from Marx is on pp. 277-78.[/note]: however, it is just as possible he would have decided it was a false trail and eliminated it! Certainly, odd references in Capital to pre-capitalist production are not used with any systematic intent.

Engels, Sweezy, and Meek, all (wrongly) believed Capital starts with ‘simple commodity production’, however they characterised its status. For Sweezy the virtue of ‘simple commodity production’ was its theoretical clarity as the starting point for a logical derivation, not its supposed empirical reality as part of a ‘corrected history’ as it was for Engels. Meek went for an ambiguous middle position: ‘simple commodity production’ was not a myth he argued but mythodology.[note]Meek Studies 2nd ed 1973 Appendix p.304.[/note] But the belief Marx began with something ‘he called simple commodity production’ is the real myth!

Generations of students have been taught Marxist economics on the basis of a distinction between capitalist production and ‘simple commodity production’. Yet this approach descends from Engels, not Marx. To turn to the present, let us look at the most widely read popularisation of Marx’s economics: Ben Fine’s Marx’s ‘Capital’. This has been through four editions since 1975 and has been reprinted many times. As late as the third edition of 1989 there still occurs the flat statement ‘Marx called such a situation simple commodity production.’[note]Fine Marx’s “Capital”, third edition, p. 11.[/note] Only in the fourth edition of 2003 is this modified to ‘often termed simple commodity production’.[note]Fine Marx’s “Capital” (fourth edition with A. Saad-Filho) p. 22. This was a result of publications of mine exposing the myth, starting first with “Engels as Interpreter of Marx’s Economics”, 1996; and then again with “Against the Logical-Historical Method: Dialectical Derivation versus Linear Logic”, 1997.[/note] The most commonly used English edition of Capital today has an Introduction by Mandel which says that Marx could not start with capitalist production, i.e. ‘generalised commodity production’, because this springs, logically and historically, from ‘simple commodity production’.[note]Marx Capital I, Introduction by Mandel pp. 13-14. Possibly Mandel originated the complementary expression “generalised commodity production”.[/note]

How did it happen no one ever actually looked to see if Marx said Part 1 was about simple commodity production? On the face of it there seems no ready explanation for such an extraordinary failure of scholarship. The explanation is that behind this myth lies another: that Marx and Engels were the same person! (the greatest testimony to which is the absurdity of the Collected Works of 50 volumes devoted to two authors who hardly ever published joint works). Meek, in all his work, was absolutely unselfconscious about treating Marx and Engels as one person. Throughout, he quoted freely from Engels when purporting to give Marx’s views. For example:

‘I still think I was right in laying special emphasis on Marx’s “logical-historical method”: indeed, if anything I think I underestimated the extent to which Marx’s economic work was guided by it…. Marx’s logical transition in Capital (from the commodity relation as such to the “capitalistically modified” form of this relation) is presented by him as the “mirror-image” of a historical transition (from “simple” to “capitalist” commodity production)…’.[note]Meek Studies in the Labour Theory of Value, Introduction to the Second Edition, (1973) p. xv.[/note]

The ‘by him’ in this remark is simply false, because all the quoted material in this passage is not from Marx but from Engels.

However, if Engels in his Preface took it for granted everyone knew Marx started with simple commodity production this may have been because of Karl Kautsky’s little book Economic Doctrines of Karl Marx.[note]Paul Hampton drew my attention to Kautsky’s work.[/note] This appeared in 1887, and was an immediate success selling 5000 copies straightaway.[note]According to Engels in a letter to Sorge of September 16th 1887 in Engels 1887-90, MECW Vol. 48 p. 104.[/note] In this, “simple commodity production” is mentioned in the first chapter.[note]Kautsky Economic Doctrines of Karl Marx, p. 19-20.[/note] There are also references to it throughout the last chapter. Undoubtedly Kautsky’s interpretation had a continuing influence; for the book was reissued many times. But it would be hasty to assume that Kautsky invented the term. Engels drew Kautsky’s attention to the importance of ‘simple commodity production’ as early as a letter of June 26th 1884.[note]Marx and Engels Selected Correspondence, p. 377.[/note] So priority lies with Engels.

It is evidence of the enormous authority of Engels, as interpreter of Marx’s meaning, that the standard textbooks for so long repeated his view of the matter.

Now, pity the situation of the ‘orthodox’ indexer. Since Engels said so, it must be true that Part 1 of Capital I deals with simple commodity production: but there is no mention of it! This did not prevent Dona Torr, for example, indexing no less than twenty pages of Volume I under the head ‘Commodity Production, Simple’ —if there are no references invent fictitious ones! This was in a 1938 edition of Capital based on a reissue of Engels’s edition. Anyone today who attempts to follow up my remarks about ‘simple commodity production’ themselves will discover a very strange fact. In the Marx-Engels Collected Works the three volumes of Capital are indexed together at the end of volume 37. When consulting this index one finds that there is one reference to ‘simple commodity production’ directly and another in relation to capitalist production. Both of these are to pages of Volume I, but nothing of the kind appears there. By contrast, the three occurrences of the term in Volume III, mentioned above, are not listed. (How can anyone conduct research on this basis!) The solution to this mystery is that this index has been compiled simply by zipping together the existing indexes of the separate volumes previously put out by Moscow; a few false entries have been deleted, but no attempt has been made to achieve concordance. The indexes to Volumes II and III were compiled in the fifties for the Foreign Languages Publishing House. The person who compiled the index for Volume III evidently thought the term ‘simple commodity production’ not worthy of mention (an interesting fact in itself). Volume I, published in 1954, did not have a subject index at all; but when the three volumes were brought out again by Progress Publishers Volume I was supplied with an index later; this time the person responsible put in a couple of fictitious entries.

It is to be regretted that the indexes of the new MEGA editions of Volume One also make concessions to the myth of ‘simple commodity production’. For the first edition (1867), MEGA lists ‘Warenproduktion – einfache’ and gives three page references. But on none of these pages does the term ‘einfache Warenproduktion’ appear, and in my opinion nothing corresponding to its meaning appears either. However when MEGA gives the original manuscript of Volume Three it does not list the term in its index – very rightly.

Here I have dealt with a strictly philological issue. Behind that lie interpretative issues, and substantive ones. I believe in both Engels is seriously misguided. However, it is open to anyone to support Engels’s reading in one or both respects. But in future I hope such people will not refer to ‘what Marx called simple commodity production’, but to ‘what Engels called simple commodity production’.

I have argued elsewhere that Engels’s reading of Capital is wrong-headed.[note]Arthur The New Dialectic and Marx’s “Capital” chapter 2.[/note] But, if so, how did it happen that the myth went unchallenged? While the authority of Engels was important in this, there must have been a predisposition present in readers of Capital to find the concept of ‘simple commodity production’ congenial. There are three considerations I offer to explain this.

a) The first generation of Marxists, such as Engels and Kautsky (who were also enthusiastic about Darwin), believed that Marx made a uniquely powerful contribution to the critique of political economy insofar as he systematically differentiated between modes of production on a historical basis. Capitalism was a historically specific social formation. They confused this genuine insight of Marx’s with a methodological imperative to explain things in terms of historical origins and development, albeit suitably dialecticised. What this missed was the possibility that Marx intended a rigorously logical ordering of concepts, employing not a historical dialectic but a systematic dialectic of the kind found in Hegel’s logic, wherewith an abstract beginning is sequentially concretised.

b) The following generations of Marxists included those educated in ‘Economics’ departments, who absorbed a different methodology, namely modelling. They naturally ‘found’ in Capital a number of such ‘models’, beginning with ‘simple commodity production’. They read the book as a sequence of more and more complex models, approximating more and more to the real object.

c) By the time Capital appeared Hegel was a ‘dead dog’ to such an extent that nobody was in a position to understand and assess Marx’s somewhat nuanced acknowledgement of his influence. Dialectical thought of the kind found in Capital was no longer familiar, even to scholars. Even if Marx had provided more guidance in a suitably didactic methodological introduction, readers would have found it difficult to fathom. Without it, they were lost. The Afterword Marx put in the second edition of Volume I certainly raises more problems than it solves. This suggests to me that Marx was not himself clear about the issues. The ‘hiddenness’ of the systematic dialectical method in the argument itself may not merely be in the interest of popularisation; to some extent it must have been hidden from Marx himself. Any attempt to recover it may well require some reconstruction of the argument.

But that takes us well beyond the simple point I am making in this article.